Economy – Dan Vock

I was the project leader for the Pew Center on the States’ November report “Beyond California: States in Fiscal Peril.” That meant I helped conceive, edit, coordinate and publicize the report. Of course, I also did quite a bit of reporting and writing. My biggest contributions on that end were the Arizona and Illinois profiles and the executive summary.

California’s problems are in a league of their own. But the same pressures that drove it toward fiscal disaster are wreaking havoc in a number of states, with potentially damaging consequences for the entire country.

This examination by the Pew Center on the States looks closely at nine states, in addition to California, that are particularly affected. All of California’s neighbors—Arizona, Nevada and Oregon—and fellow Sun Belt member Florida were severely hit by the bursting of the housing bubble and landed on Pew’s top 10 list of recession-stricken states facing a similar set of fiscal difficulties. A Midwestern cluster comprising Illinois, Michigan and Wisconsin emerged, too, as did the Northeastern states of New Jersey and Rhode Island.

These states’ budget troubles can have dramatic consequences for their residents: higher taxes, layoffs or furloughs of state workers, longer waits for public services, more crowded classrooms, higher college tuition and less support for the poor or unemployed. But they also pose challenges for the country as a whole. The 10 states account for more than a third of America’s population and economic output. And actions taken by state governments to balance their budgets—such as tax increases and drastic
spending cuts—can slow down the nation’s economic recovery.

The entire report (PDF) is 65 pages long, but the Arizona and Illinois pieces provide a good sample of my contributions.

The report generated significant media coverage. Among the outlets that covered the report were PBS’ NewsHour (vide0), ABC News (story), Fox Business (video), the Financial Times, Christian Science Monitor (story) and dozens of state and local outlets. Illinois Gov. Pat Quinn (D) even called in to talk with my director on C-SPAN’s Washington Journal.

My assignment for this magazine story was simple: Explain how the recession started.

To tell the story, Illinois Issues combed through congressional testimony, position papers, media accounts and data from federal and business sources. What emerges is a common thread that explains how we got into this uncommon recession.

The story of the collapse takes many twists and turns, with fateful swings through Wall Street and Washington, D.C. Those are the places where the economy picked up steam, thanks to the political momentum, financial wizardry, insider deals, lax oversight and loose money they created. And that’s where most of the fingers are pointing now.

But the main reason for the recession is that too many people bought houses they couldn’t afford, and everybody was banking on those houses.

The whole Illinois Issues story is here.

Dan Vock

Smart reporting. Great writing.

Category: Economy

Beyond California: States in Fiscal Peril

A spectacular collapse